June 15 (Bloomberg) -- China broke global commerce rules by
imposing anti-dumping and anti-subsidy duties on more than $200
million of U.S. steel products, the World Trade Organization
said in a ruling today.

Judges agreed with the U.S. that China failed to prove that
imports of grain-oriented flat-rolled electrical steel, produced
by companies such as West Chester, Ohio-based AK Steel Holding
Corp. and Pittsburgh-based ATI Allegheny Ludlum Corp. had caused
injury to Chinese rivals. The panel also found that China began
its anti-subsidy proceedings without adequate evidence showing
U.S. companies were receiving illegal government aid.

“China simply has to play by the rules to which it agreed
when it joined the World Trade Organization 10 years ago,” U.S.
Trade Representative Ron Kirk said today on a conference call
with reporters.

President Barack Obama’s administration has engaged in
trade disputes with China over issues including tires, raw
materials, auto parts, electronic-payment services and wind
power, Kirk said. He called today’s decision a “significant
victory.”

China, the world’s biggest steel market, announced
provisional anti-dumping and countervailing levies on the
specialty-steel products, used in large electric machines such
as transformers and reactors, in December 2009. The anti-dumping
duties were set at 7.8 percent to 64.8 percent and
countervailing duties at 11.7 percent to 44.6 percent in 2010.

Chinese Position

The Chinese mission to the WTO said in a statement from
Geneva that judges backed China’s “key claims” and ruled in
favor of its use of “facts available” in calculating “subsidy
rates, the disclosure of information on the dumping margins and
the disclosure of information on the subsidy benefit relating to
the government purchase of goods.”

Chinese steel producers Wuhan Iron and Steel Corp. and
Baosteel Group Corp. accused AK Steel and ATI Allegheny of
benefiting from subsidies provided under U.S. federal and state
laws and engaging in injurious dumping.

“By unfairly restricting imports of American steel, China
has for too long attempted to tilt the playing field for the
global steel trade in their direction,” Leo W. Gerard,
president of the United Steelworkers of America (USW), said in a
statement. The WTO’s action is an “important step toward
leveling the playing field” for U.S. workers, he said.

The U.S. argued that China didn’t follow WTO procedures by
failing to disclose the facts underlying its legal conclusions
and not explaining its calculations.

Both governments have 60 days to appeal the panel’s
findings. China said it “will conduct further evaluation and
reserves the right to appeal.”